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Nick Martin on how Wine Owners can help transform fine wine merchants

In his wide-ranging interview with Richard Siddle, Nick Martin (co-founder of Wine Owners) explains how it all started, and how our software as a service (SaaS) platform broadened as businesses approached us to solve their wine-specific challenges

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You might not know Wine Owners, but you will be familiar with all the prestigious wine names, merchants and fine wine brokers that it works with says Richard Siddle of The Buyer magazine.

In his wide-ranging interview with Richard Siddle, Nick Martin (co-founder of Wine Owners) explains how it all started, and how our software as a service (SaaS) platform broadened as businesses approached us to solve their wine-specific challenges.

As a result we developed inventorying capabilities with 67 Pall Mall; a wine warehouse management solution with Western Carriers (one of the largest and most admired warehouses in North America); self-directed brokerage with The Wine Cellarage in New York; and the Hub wine merchant/ retail solution with a number of SME wine trading businesses.

Today our SaaS platform manages $2bn of fine wine, 19,000 inventories, 350,000 plus wine references and is used throughout Asia, North America and Europe.

In the interview we describe why our technology and systems are so well suited to the needs of the wine trade, how they can transform the day to day running of a wine business, the sorts of businesses who can benefit from the wide-range of software solutions provided, how to unlock business growth, and a check list of questions you should be asking yourself when evaluating what new software solutions are right for your business and level of ambition.

READ THE FULL INTERVIEW HERE

Read more: Solutions for Retailers, Merchants, Importers

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Should you be bending software into wine shape?

Should you be bending software into wine shape or going a de-risked route, of a core business platform that’s specific to the business of wine?

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ERPs from the major vendors are supposedly easy to configure and to run. Yet configuration quickly turns into customization. Customization turns into compromise, and scope creep racks up the fees because business analysts rarely get on top of enough detail up-front to scope the work involved accurately enough. So you end up paying for a changing scope. The question you need to ask is: do I bend major vendor ERP software into wine shape or go a de-risked route with a business operating platform that’s specific to the business of wine?

Software as a Service (SaaS) should be a great thing. It reduces cost of ownership, improves availability and security, keeps you up to date with the latest version, gives you access to road-tested new features and makes the notion of obsolete software obsolete! No more 8-10 year reinvestment cycles.

As software authors and providers have re-engineered for SaaS and make their older platforms obsolete, the pressure is on businesses to carry on with unsupported systems or bite the bullet and move.

ERP frameworks (stands for enterprise resource planning which in plain non-tech English means ‘the software that runs your business’)  and generic WMSs (warehouse management systems) are typically proposed by software houses who act as resellers as the way to go.

The world’s largest software vendors make a fortune from these one-size-fits-all frameworks in license fees, precisely because they’re supposedly easily configurable for any and every business. 

Except they’re not. Configuration quickly turns into customization. Customization turns into compromise. Compromise involves changing the way you run your business to fit in with global concepts of best practise. But best practise for a warehouse storing CPG products isn’t the ideal way to run a fine wine warehouse.

Software houses brim full of developers (who love coding more than configuring) like these ERP frameworks too because they can charge large sums and the configuration that becomes customization (that’s coding) turns the development cycle into an open check.

Meanwhile the software house’s business analysts are meant to grasp your business specificities in depth; at a level of granularity sufficient to enable a comprehensive business and technical specification to be formed. Except they rarely get into enough detail, because they don’t always know what question to ask relative to wine, or you forgot to mention something you considered so obvious that it wasn’t worth explicitly describing. 

So what’s the difference between configuration (in scope) and customization (out of scope)? It’s called scope creep, which is a deployment team’s way of saying it’s your fault (that’s right you, the customer) for not being precise enough in the first place. After all, you’re the one who “keeps changing the spec” and who “got bits wrong”.

ERP frameworks want to do everything. That would typically include accounting, marketing (CRM), e-commerce and so on. It would also include the functions you need to operate within your market, and it’s these that end up compromised and limiting your scope for business development.

Think about it: is a dedicated accounting system like Sage, Quickbooks or Xero like to be better or worse than an accounting function that’s part of an all-singing (but not necessarily dancing) ERP? Are specialist accounting businesses likely to be more complete, adaptable, quicker and cheaper to set up than an ERP? You bet. 

The thing is, in these halcyon days of APIs and web services, connecting best-of-breed platforms together is a lot easier than it used to be and enables you to pick the best of the bunch. Sure connectivity costs a bit, but it’s a small price worth paying to get the best set up for your needs. That set up would include core business functionality that’s specifically fit for your wine business, integrated with general business functions like accounting, marketing and e-commerce that are best of breed.

So back to the question: should you be bending software into wine shape or going a de-risked route, of a core business platform that’s specific to the business of wine?  That knows wine because it’s underpinned with one of the world’s best referential wine databases and associated rich content (and structured appropriately). That reflects and helps to redefine wine industry best practise. That streamlines processes rather than demands you conform to a generic high-level concept of best practise.

As one of our customers said to us recently: “we don’t want to adapt to software – we want it to adapt to us”. 

Learn more about our Software as a Service for the wine business

See also Industry specific SaaS

Bottle and glass of wine in shadow

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Evolution of Fine Wine Systems – From ERP to DOP (ft. research from Forrester Research)

How wine tech can help you win new customers and keep them happy (and make you happy too)

Data integrity in the fine wine market

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Featured

Data integrity in the fine wine market

The fine wine market suffers from poor data management and a lack of standardization of product descriptions.

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Visualisation of wine data

The fine wine market suffers from poor data management and a lack of standardization of product descriptions. The practical negative effects are many:

  1. A cause for private clients to think they have stored wines different to their actual stocks, resulting in the contingent liability of future claims on merchants and storage providers, not to mention loss of goodwill.
  2. Future mis-picks that have a cost to merchants operating private client reserves/ storage services and to storage businesses that suffer unrecoverable costs associated with redeliveries.
  3. A cause of trades that end up being cancelled due to incorrect wine descriptions, or due to insufficient detail (and lack of clarity), wasting time and in some cases causing compensation to be paid out to buyers.
  4. The potential impact on insurance premiums if claims are made to cover a liability.

Efforts have been made to create standards notably Liv-ex’s LWIN schema that aims to create an ISBN equivalent unique identifier, to help with systems interoperability. 

All such efforts are to be welcomed and do help, specifically when the data schema is open source.  Trade participants expect there to be certainty around continued open and free access to the base referential record, so unique identifiers are only likely to be adopted wholesale when they are freely available under terms that guarantee ongoing free community use. Open source unique identifiers can be monetised by information providers in the additional information that is connected to it, such as pricing, producer information, labels, other imagery, drinking windows, trend data and analysis.

Using unique identifiers to share product information between suppliers, and to recognize purchased or inbound wine correctly is helpful when wine names of the same producer and between producers with similar names is helpful.

Nevertheless it’s only half the answer. Fine wines do not inbound with industry standard barcodes, and wine still needs to be landed correctly. Team members typically charged with handling arrivals have some knowledge but are rarely experts. Variances between purchase orders and delivered wine are common. So an efficient landing wine process that improves accuracy of landing is essential.

Coming from a background in customer relationship management (CRM), data processing, and creating single customer views that draw on data from multiple internal and external databases, it was obvious that the challenges of name and address processing are not dissimilar to wine product name processing, albeit with some significant methodological adjustments required.

Best practice in wine warehouse management therefore starts with implementing an efficient workflow for receiving and identifying wine in conjunction with an underlying reference database and fit for purpose data processing.

Best practice data management essentials:

  • Properly structured data model that specifically designed for wine records, with a referential database and associated wine information related to each product reference.
  • Validation of all data fields at time of input as much as is practicable.
  • Wine-specific matching technology (with suitable ETL tools).

See also Wine data

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What’s a Wine ERP and why doesn’t mine work?

The world of closed ERP systems where everything is under one roof is passing and the age of the Digital Operating Platform is dawning. To shape a platform underpinned by a common data model, for a common industry operating model. It’s a philosophy that’s based on bringing together the best-in-class for every function, to facilitate collaboration across a business whether big or small.

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ERP stands for Enterprise Resource Planning, a term that dates back to the 1990s. It describes a suite of integrated business applications. ERPs were first developed for materials resource planning within manufacturing (which is the origin of the term). Think purchasing, supplier management and inventorying of SKUs. By the year 2000 ERPs would add CRM to support sales and then various other ‘front office’ functions such as accounting.

ERP tools typically share a common process and data model. ‘Everything under one roof’ became the mantra of ERP software providers. A slew of companies came to be dominant during this era including SAP, Oracle and Microsoft. That made sense in a pre Software as a Service (SaaS) world. It didn’t matter if the ERP accounting capability was simply good enough but not best in class. It didn’t matter that the CRM capability ticked a number of boxes but didn’t set marketing’s pulse racing with solutions fit for the post-digital explosion world. It was more important to have business functions within a ‘suite’ of software, because so much had been invested in ‘everything under one roof’ and the alternative was having to connect up software from different vendors which was typically a difficult, time consuming and expensive process..

And therein lies the clue to why many ERP wine systems don’t work very well. 

For the Hub we took the view early on that we weren’t going to try and reinvent the wheel when there were many effective market-leading packages out there for core business functions like accounting, CRM and e-Commerce. We wanted to integrate with the very best in class, to provide the most powerful and easiest-to-use business platform at the best value point.  

In a world of best of breed SaaS platforms – cloud based solutions, which can be easily connected/integrated by open, accessible APIs (Application Program Interfaces) the era of ‘all under one roof’ ERPs is over.

We believe we have entered the era where a customer can choose the best and most appropriate CRM for their business – Wine Owners is NEVER going to build a CRM that is better than Salesforce or Hubspot. Similarly Mailchimp or Active Campaign are the best Email Service Providers (ESPs). As are Xero and Sage as SaaS based accounting platforms. 

Our view is that the world of closed ERP systems where everything is under one roof is passing and the age of the Digital Operating Platform (DOP) is dawning. To shape a platform underpinned by a common data model, for a common industry operating model. It’s a philosophy that’s based on bringing together the best-in-class for every function, to facilitate collaboration across a business whether big or small. 

The wine and spirits sector is fairly unique due to the idiosyncrasies of inventory management in this world. It needs a data model that is customised for its needs, flexibility of stock management, capabilities to handle physical, client, future and virtual stock types.

The Hub from Wine Owners excels as a sector-specific platform for managing wine inventories and connected, end-to-end business processes such as purchasing, sales order processing, multi-channel sales management and shipments. That’s our expertise. That defines us as the de facto operating system for independent wine businesses. We believe very strongly in the power of that specialist core, whilst making it open to connect to business SaaS that are the best at what they do.

The Wine Hub manages all your inventory no matter the type, and it’s your purchasing and sales platform. It feeds your purchase and sales orders and cost of sale information into your chosen accounting platform. The Wine Hub manages your clients and suppliers and feeds that data into your selected CRM and E-Commerce platforms that are world class at engagement, nurturing, upselling and cross selling.

‘All under one roof’ ERP is dead. That’s why yours doesn’t work. Welcome to the world of the Digital Operating Platform (DOP).

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The Wine Tech Insiders – Going global with your wine brand

The Wine Tech Insiders discuss organic wines, UK budget announcements and common success factors to take your wine brand globally.

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The Wine Tech Insiders discuss organic wines, UK budget announcements and common success factors to take your wine brand globally.

There is a significant overhead that tech can solve in terms of managing the purchasing of wine. It’s a complicated map on the distribution and retail side but technology can make an enormous difference and save a huge amount of admin and make it much easier for people to be importing wine from all over the world.

Your Insiders:

Laurie from Outshinery

Seb from Troly

Nick from Wine Owners

The Wine Tech Insiders podcast is also available on Apple Podcasts.

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Liv-ex Report – “The Wine Business of Tomorrow”

In the latest Liv-ex report, experts across the industry discuss technology and the future of the wine business.

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The global pandemic, as well as changes in technology and consumer behaviour, are pushing wine businesses to re-imagine their business models.

In their latest report, “The Wine Business of Tomorrow”, Liv-ex and industry experts Richard Siddle, Robert Joseph and Nick Martin re-imagine three of the most common wine business models – stockholding, virtual stockholding and wine investment – by considering how technology like APIs, bots, algorithms and ERPs are improving efficiency and profitability today and into tomorrow.

Liv-ex Report - The Wine Business of Tomorrow

More from the blog

The changing face of fine wine retailing

When to move your wine business off spreadsheets to a business operating system (ERP)

When should you consider changing your wine business management software?

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When to move your wine business off spreadsheets to a business operating system (ERP)

Why move your wine business from spreadsheets to a business operating system (ERP) in the Cloud and how to make it easy.

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January 2021

“Hello I was just wondering whether those wines I’d bought en primeur from you in 2018 had landed yet?”

“Ah yes, I’m glad you called. Beat me to it. They’ve just arrived, but you know, what with Brexit and Coronavirus, everything’s taken longer. Can I get back to you tomorrow?”

A week later

“Good afternoon John, I’m just confirming that your stock is ready to transfer to you. 12 bottles just as you ordered. They’re in 6 packs but that’s how it is these days. Where would you like them delivered to?”

“Remember, I’d asked you to open a client reserves account for me when they arrived?”

“Ah yes, yes….they arrived into our account at the warehouse before Christmas, so I’ll get your account set up out and move them across.”

“OK thanks. Just so I know, so how long does it take normally for you to notify me of new arrivals?”

“Well I go through the what’s new in the warehouse, and cross check against my purchase orders and the invoices whenever I can. It means printing off a couple of different spreadsheets and making sure these tally with the warehouse accounts. As you can imagine it’s time-consuming at the best of times, so with Covid and Brexit…”


It’s far from uncommon for wine businesses to use spreadsheets to manage their inventory. Although Excel is ubiquitous and easy to work with, trying to manage inventory on a spreadsheet (or should we say a shoestring?) is the cause of many a lapse. 

Lapses that hold a business back and severely limit its growth potential, in so many ways, one of which was spoofed in this article’s opening sketch. 

Why move from spreadsheets to a proper business operating system (ERP) in the Cloud?

Excel is a powerful productivity tool. So why wouldn’t it be more than good enough for managing lists of wine stocks, client reserves, lists of en primeur purchases, and so on? There are many pitfalls when looking to manage key aspects of your business off a spreadsheet:

  • you might be struggling with scattered data, originated in different layouts, aggregated from different sources, all of which increase the scope for human error
  • you’re spending more time rekeying data rather than working with it, wasting valuable time
  • you’re increasing the risk of manual errors such as duplicating stock, loss of data and overstated or understated stock positions 
  • your team is not getting real-time visibility of what you have to sell, has limited access, and may end up relying on out of date information 
  • reconciling warehouse-stored wines against purchase orders is time consuming
  • reconciling arrivals with sales is time consuming
  • double selling happens, costing the business money and at the same time undermining client relationships
Move your wine business off spreadsheets to a business operating system (ERP)

Cross referencing cracks

Think about how many cross references you need to make when working off spreadsheets:

  • Cost of stock
  • Cost of RH&D
  • Currency rates
  • Webshop or online product pages (or downloadable spreadsheet?)
  • Pro forma invoices
  • Warehouse stocks
  • Client stocks
  • Inventory queries

Cross referencing is manageable when you are selling low volumes, but as soon as the business gets a bit busier, working off Excel becomes much trickier. The software might have cost you next to nothing, but your time absorbed by admin and the inevitable mistakes come at a real cost. That cost is in your time, the opportunity cost of not spending as much time as you would like productively, and the cost of making good.

Bud Cuchet, owner of Cuchet & Co (and previously a founding Director of Fine & Rare), who upgraded from spreadsheets to the Hub business operating system in 2020, explained, “I was working on a very clunky setup with no link between my accounting system and my spreadsheets. 

Having a software system that is specifically created for wine makes the process of creating a stock entry so much easier, and only requires a single action, whereas with Excel documents I would have to re-key multiple times. 

My biggest concern was human error and double selling. And double selling comes at a cost that is far greater than the cost of paying a monthly subscription for an ERP. The business system I selected, the Hub, took away the risk of errors by “dehumanising” (in a good way!) and it gave me peace of mind. I handle everything on my own, from stock management to shipping, and I couldn’t do it all without the Hub”.

My biggest concern was human error and double selling. And double selling comes at a cost that is far greater than the cost of paying a monthly subscription for an ERP.”

Switching to a fully integrated business operating system (sometimes called ERP by techies) will allow you to manage your business activities and track purchase orders and sales orders every step of the way. Every task can be recorded, next due tasks anticipated, communication with suppliers, clients, warehouses and carriers/ shippers managed through a single platform. 

No wonder an ERP protects you against the risk of easy-to-make mistakes. But it also buys back all the time that’s wasted trying to fix them, saves you money by ensuring you don’t over-sell, mis-pick or lose track of wine. You being better organised improves customer loyalty and drives repeat purchasing. 

Reporting also becomes much easier. If it’s in the database it can be reported on. Who bought 2018 Burgundy, what has Mr Smith bought in the last year, who are my top customers, who are customers who haven’t bought for over a year, has Ms Patel’s pre-arrivals arrived in my warehouse?

Moving to an ERP – how to make it easy

Evaluate the state of your data

Determine what you actually need, what is outdated or unnecessary and how it will be used going forward. 

Prepare your data

Jonathan Picchi, our Data Manager, has a few tips on how to prepare for an easy data migration:

  • Think through which data elements you use to run your business on a daily basis and what’s really important. 
  • If you’re on spreadsheets you may be missing data you’d really like to have going forward, so think about how to originate it, or where it may be held elsewhere such as on your email service provider platform
  • Prepare all data you want to import relating to your wine stocks, client-stored wines, clients and suppliers 
  • Specify the format and meaning of your columns
  • Explain how you uniquely identify wines to tell them apart
  • Explain any abbreviations/ codes used in your data
  • Try to make sure you’ve got all the information ready to keep the post-migration corrections to a minimum

It does require preparation on your part, but we also provide data services to make migration onto the Hub business operating system straightforward. You’ll have a new system with clean, reliable, organised data.

A new beginning

Managing your business on an ERP will help you to manage purchasing and sales, will improve margin management, enables you to stay on top of key tasks, delivers an improved customer experience, and helps you to sell more wine. Not forgetting that it’ll save precious time that can be spent focusing on developing your business.

The Wine Hub

Specifically built to meet the needs of the independent wine businesses, the Hub understands wine and manages all your inventories – of whatever type you sell. This includes wines that are physical in storage or in a shop, future arrivals, en primeur, brokerage, consignment or 3rd party stock feeds. It handles them all.

“The Hub is designed to work for your business ‘out of the box’. Our dedicated support team will be with you the whole way – including migrating your existing wines, clients and suppliers across to the Hub, providing user-specific training, and offering client support during working hours. Plus, when we can’t be there to help you, there’s an extensive library of resources at your disposal which includes a large number of instructional videos.” James Bonavia, Client Support Manager.

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The Wine Tech Insiders Podcast

The Wine Tech Insiders discuss tech topics in the Wine and Drinks industry.

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Nick and The Wine Tech Insiders discuss tech topics in the Wine and Drinks industry. Join in and subscribe to the podcast.

Our Wine Tech Insiders:

Wine Tech Insiders

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Entreprise de vins et spiritueux – est-il temps changer votre logiciel de gestion intégré?

Dire adieu au logiciel de gestion intégré que vous utilisez depuis des années peut être intimidant. Vous êtes conscient de ses défauts, mais vous passez outre et avez trouvé des solutions de contournement. Même si cela est compréhensible, ne vous contentez plus d’un logiciel en fin de vie ou inadapté à vos besoins et priorisez l’amélioration systématique de votre activité, la croissance de votre chiffre d’affaires et l’efficacité de votre entreprise.

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Read this article in English

Entreprise de vins et spiritueux – est-il temps changer votre logiciel de gestion intégré?

Votre logiciel de gestion intégré ne sera plus supporté ou développé d’ici 2 à 3 ans.

En pratique, cela signifie que vous travaillez au mieux avec des fonctionnalités dégradées qui fonctionnent avec des moyens de fortune.

De plus, votre logiciel pourrait ne plus bénéficier de toute la gamme de mesures de sécurité nécessaire, augmentant la possibilité d‘un risque accru pour votre entreprise car les correctifs informatiques ne sont plus testés rigoureusement, ou parce que les tests d’intrusion ne sont plus réalisés.

Lorsque votre logiciel approche de sa “fin de vie”, n’attendez pas pour en changer, afin d’assurer que votre entreprise ne soit ni limitée, ni menacée.

Votre logiciel de gestion intégré ne suit plus les evolutions du marché et ne vous permet plus de tirer profit des opportunités qui se présentent à vous.

Dans ce cas, votre logiciel n’est pas en fin de vie mais ne vous permet simplement plus de vous développer. Cela ne signifie pas que vous ne pouvez plus l’utiliser, mais dans l’intérêt de votre entreprise vous devez accepter qu’il n’est plus adapté à vos besoin et objectifs. 

Cela peut signifier que les innovations ou les initiatives de développement que vous avez en tête ne sont pas réalisables. Ce scenario n’a jamais été aussi vrai. La crise du coronavirus a accéléré la transformation digitale des entreprises. Les gagnantes ont doublé leur chiffre d’affaires alors que les perdants ont au mieux fait du sur place.

Vous prenez aussi un risque dans ce cas-là. Vous manquez des opportunités de vous développer, vous vous laissez distancer par vos concurrents, vous impactez négativement l’image que vos clients ont de votre entreprise et n’êtes pas efficaces dans la gestion de vos opérations. Cela se traduit par une incapacité à délivrer un service client solide et constant. Votre expérience client dépend de votre excellence opérationnelle. Ce dernier terme peut sembler un peu trop “à la mode”, mais la manière dont vos clients vous perçoivent est importante. 

logiciel de gestion intégré

Que faire lorsque vous avez réalisé que vous devez changer ?

Soyez circonspect. N’attendez pas qu’il soit trop tard pour planifier. Cela vous laissera du temps pour réfléchir à ce dont vous avez réellement besoin et ce qui est le mieux adapté. Cela vous donnera également le temps d’évaluer le coût d’une telle migration et de vous y préparer correctement.

  • Faites une liste de vos besoins : ce que vous faites quotidiennement, ce qui est chronophage, ce qui fonctionne (et ne fonctionne pas) pour vous sur votre système actuel et ce qu’il manque.
  • Quelles parties de votre activité aimeriez-vous développer? Assurez-vous de consulter votre équipe si vous n’êtes pas le seul utilisateur.
  • Qu’aimeriez-vous faire, mais qui vous semble hors de portée ? Les initiatives qui représentent un défi dans l’état actuel des choses pourraient être simples et nécessiter peu de ressources avec un système adapté. 
  • Quel serait le retour sur investissement si vous pouviez accomplir certaines ou toutes les choses que vous avez en tête?
  • Commencez vos recherches, et si possible consultez vos pairs dans l’industrie- quel logiciel de gestion intégré utilisent-ils ? Une question importante à vous poser : les solutions disponibles sont-elles spécifiques à votre industrie (différence qui s’avère majeure dans le cas du secteur du vin) ?
  • Lorsque vous avez effectué votre présélection, demandez des démonstrations. Assurez-vous d’avoir une liste des fonctionnalités requises, d’être clair sur vos objectifs et vos échéances. Assurez-vous enfin de bien comprendre le processus de migration, ce qui est requis et ce qui n’est pas essentiel, et quel niveau d’assistance vous recevrez de la part de votre fournisseur. 
  • Il est maintenant temps de prendre votre décision. Incluez les membres de votre équipe qui utiliseront majoritairement votre logiciel. Même si au final la décision n’appartient qu’à vous, l’efficacité de votre entreprise dépendra de l’adoption de votre nouveau logiciel de gestion intégré par ses atouts les plus importants : votre personnel. 

Dire adieu au logiciel que vous utilisez depuis des années peut être intimidant. Vous êtes conscient de ses défauts, mais vous passez outre et avez trouvé des solutions de contournement. Même si cela est compréhensible, ne vous contentez plus d’un logiciel en fin de vie ou inadapté à vos besoins et priorisez l’amélioration systématique de votre activité, la croissance de votre chiffre d’affaires et l’efficacité de votre entreprise. Regagnez un temps précieux, temps que vous pourrez utiliser de manière productive et créative pour construire une offre produit attractive pour vos clients. 

Le Hub est un logiciel en tant que service (SaaS – Software as a Service) abordable, durable, avec une configuration et migration simples. C’est une plateforme éprouvée qui a été créée spécifiquement pour l’industrie du vin, qui réduit votre administratif et libère un temps précieux pour vous concentrer sur vos clients. Il vous connecte à vos chaines d’approvisionnement  et organise vos canaux de distribution. Il vous permet d’élargir votre offre, d’atteindre une clientèle plus large, et de tirer profit des nombreuses opportunités du marché.

Pour plus d’informations ou si vous souhaitez une démonstration, n’hésitez pas à nous contacter (en français ou en anglais).

PLUS DE CONTENU (anglais)

Evolution of Fine Wine Systems – From ERP to DOP

Nick Martin on how Wine Owners can help transform fine wine merchants

How 10 wine businesses went digital this summer

 188 total views,  2 views today

When should you consider changing your wine business management software?

It can be a bit daunting to say goodbye to a wine business management software you’ve been using for years. Whether it is close to its “end-of-life” or it is no longer adapted to your needs, making do is no substitute for prioritising systematic business improvement, top-line and bottom-line growth, and making your business more efficient.

 254 total views,  1 views today

When should you consider changing your wine business management software?

Your software will no longer be supported within the next 2-3 years nor will be developed. 

Practically speaking, this means that you’ll be working with outdated functionality that will be patched up to meet standard service level agreements but not much else besides. 

In addition, your system might no longer be afforded the full gamut of security measures, opening up the possibility of a heightened risk to your business because patches aren’t rigorously tested, or because costly penetration testing is no longer carried out.

As and when your software approaches its “end-of-life”, you need to move on as soon as possible to ensure your business isn’t constrained or threatened. 

Your software is not keeping pace with the market and is not allowing you to capitalise on opportunities.

Here your software is not at the end of its life, however it’s come to a point where it is not giving you the opportunity to grow. It doesn’t mean that you can’t keep using it, but for the sake of your business you are ready to accept that it is no longer suitable for you and that it is just not keeping pace with what you’re trying to achieve. 

It could mean that innovations or business development initiatives that you have in mind are unsupported. Never has that scenario been truer. Covid has accelerated digital transformation. Winners have doubled their turnover. Losers have at best trodden water.

In this case, too, you are taking a business risk. You are missing the opportunity to grow, falling behind business investors and innovators, impacting customer perceptions, falling short on operating as efficiently as possible. Which means falling short of delivering a strong and consistent customer service. Customer eXperience (CX) depends upon operational excellence. The latter might sound like a buzzword, but how the customer perceives you, matters.

wine business management software

So what to do now that you realise that you need something else?

Be deliberate. Don’t leave it until it’s too late to plan. It will give you time to think about what you really need, and to see what works best for you. And more importantly it will give you time to assess the cost of migrating and to prepare carefully.

  • Make a list of your business needs: what do you do on a daily basis, what is time-consuming, what works for you on your current system, what doesn’t and what is missing. 
  • What are the parts of the business that you would like to see grow. Make sure you consult your team in the process if you’re not going to be the only user!
  • What are the activities you would like to do, but which feel out of reach? Initiatives that appear challenging from the perspective of the status quo are often made straightforward and don’t require significant resources with the right system. 
  • What does a return on investment look like based on being able to achieve some or all of the things you have in mind?
  • Start your research: have a look around, see what is out there, if possible ask your industry peers what software they use and what they think about it. One good question to ask yourself is whether the solutions you are looking at are specific to your industry (this makes a huge difference in the case of the independent wine sector).
  • Once you’ve established the shortlist, request a demo. Make sure you have the list of all functionalities that you need, are clear about your business goals and your time frame. Make sure you also fully understand the migration process, what’s really needed and what’s not essential, and how much assistance you will get from the software provider.
  • So here comes decision time. If you’re not going to be the primary user of this software, make sure you involve your team in the decision. Even though you are the one who may make the final call, the efficiency of your company will depend on the adoption of new business software by its most important assets – your people.

It can be a bit daunting to say goodbye to software that you’ve been using for years. You are more than aware of its shortcomings, but still, you’ve constructed work-arounds, familiar tasks (however elaborated they may be), and fear change. That’s understandable, yet, whether it is close to its “end-of-life” or it is no longer adapted to your needs, making do is no substitute for prioritising systematic business improvement, top-line and bottom-line growth, and making your business more efficient. That’s how you win back valuable time. Time that can be used productively, creatively. To build a business that your customers are as passionate about as you are. 

The Hub is an affordable, future-proofed, cloud based software as a service solution, with easy, low-cost migration and set up. It’s an industry-specific, proven, platform that reduces administration and frees up time to focus on your customers. It connects you to your sources of supply and orchestrates marketing and sales channels to market. It allows you to broaden your appeal, reach more of your addressable market, and enables you to capitalise on market opportunities.

MORE CONTENT

Evolution of Fine Wine Systems – From ERP to DOP

Nick Martin on how Wine Owners can help transform fine wine merchants

How 10 wine businesses went digital this summer

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The changing face of fine wine retailing

There was once a time in fine wine retailing when to be a wine merchant meant being a stockholder; buying and paying for stock you owned to sell or to lay down.

Today there are two retailer archetypes firmly established: low stockholders and merchants who believe in the power of stockholding.

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There was once a time in fine wine retailing when to be a wine merchant meant being a stockholder; buying and paying for stock you owned to sell or to lay down.

So what changed? Simon Farr, co-founder of Bibendum before becoming Chairman of Cru World Wine and Oeno (and a director of Wine Owners) says: “the biggest thing that happened to fine wine over the last 40 years was that the rest of the world got rich. More wealthy individuals chose to consume and collect fine wine. Demand for fine wine increased. Supplies of the most sought-after wines didn’t – can’t. Scarcity drives up prices for in-demand wines. As the cost of wine rises, the pressure on working capital increases and drives a reduction in stock holding by the wine trade.”

These pressures have created a fragmentation of stockholders. The days of a single dominant market maker have gone. It’s difficult in today’s market to create the big fine wine franchises of the past, as purchasing power of merchants reduces. Margins in high liquidity markets have fallen and that’s exerted pressure on costs. 

Today there are two retailer archetypes firmly established.

The 2 archetypes of wine retailers

Firstly there’s the low stockholder model.

The whole world is moving to low cost, low inventory models. Wine is no different. We are seeing a re-examination of what it is to be a wine merchant, with a focus on low working capital intensity and low cost.

A low stockholder merchant or retailer doesn’t want to tie up precious working capital in wine, whether physical or as wine futures. Historically there’s been little or no specialism. The low stockholder wants to offer as many wines as possible and attract buyers who would otherwise find it hard to source the wines they want from local merchants or retailers.  

When the first generation of low (or virtual) stockholders first appeared in the 1990s consumer perception was of little value-add other than the very large database of wines, many of which were indeed otherwise hard to find. 

Whereas consumers wouldn’t have perceived a low stockholder as having as much knowledge as a traditional merchant, latterly technology has shifted that perception. Increasing transparency of market pricing has also helped the professional sourcer of stock, who of course is relatively unconstrained by what can be offered for sale. 

There are other constraints at play, nonetheless. In a perfect world the low stockholder needs accurate supplier feeds of inventory and efficient logistics. The reality is a little different. Few suppliers operate APIs (database-to-database feeds known as Application Programming Interfaces). Wine logistics and shipping is slow, and moving glass around comes with the risk of damage.  Sources of supply are scattered across different geographies. Wine sourced internationally can come with  different luggage tags and different packaging, whilst the desire to obscure sources can also obscure provenance. Then there’s the dreaded failure rate due to poor (or no) systems within sources of supply.

So in practise working capital that a stockholder might have put into stock gets spent on extra pairs of hands needed to compensate to deal with low volume, high value products. High administrative expenses end up being needed to operate this model. 

Liv-ex helps with that problem, because they do the heavy lifting in shipping wine, managing logistical risks and helping to manage buyer risk with their Standard in Bond stock designation. From nowhere else can you source as much virtual stock with the pricing transparency of comparing offer prices to last trades and using that data and other parameters to filter down to a manageable list. A Liv-ex feed of virtual stock is a no-brainer for a retailer committed to the low stockholding model, but doesn’t automatically solve the immediate challenge of market differentiation. As you’ll see, the low stockholding business isn’t alone in needing to figure that out.

Secondly there’s the merchant who believes in the power of stockholding. 

Today’s economics are favourable to stockholding businesses. The cost of capital is low and there’s a great deal of investor money looking for a home with a purpose and a stable return. Inflation is low. Arguably the opportunity cost for investors or business owners is low. Wine is a good store of value and stock builds in value over time. 

Notwithstanding those facts, returns on wine can take time, and value starts to rise only when stocks of widely available vintages sell through. 

A stockholder can’t offer the range that a low stockholding model promises. They are limited by availability to source and available capital, and so appeal to a narrower addressable market with a more limited range of wines.

But stockholders do have some advantages over their uninvested competitors. Stockholders can be much more efficient in their shipping costs given moving and storing wine is expensive and logistics is generally tricky. Certainty of stock availability means the failure rate is very low, and it’s easier to meet consistently high operating standards.

The nature of being a stockholder has changed in the last 30 years as a consequence of market transparency and higher prices. A stockholder needs better market insight and a clear sense of which stocks are worth buying into. Being a stockholder of high production, high availability wine that gets consumed slowly (such as classified growth Bordeaux) can be a struggle. The market overall is flat, Generation Y and Millennials are uninspired, and there’s limited scope for differentiation. 

Back to Simon Farr who I asked, how do you carve out a competitive advantage as a stockholder? “The edge is having a slow wine approach. To do that you need patient capital. I look at a 3-5 year holding period so that trade quantities of pristine stock can be offered at a more mature part of the life cycle”.

“Building a franchise with a clear position is key here. You have to find something that you can do better than someone else. Then you back your judgement and take positions in wines and categories that you believe in.” 

The new stockholders

Against the backdrop of a move to low margin/ low stockholding on the one hand, and increasing specialization among stockholders on the other, the question has to be asked, are collectors able to fill the stockholding inventory gap? 

Of course a substantial part of the secondary market is already represented by the consignment or broking of collector wines held in storage. We know of at least one, once-dominant, stockholder merchant who buys very little these days, because they have so much client stored wine that they’re able to leverage.

However as the low cost, low inventory model develops, and perhaps as the two archetypes begin to break down into a blend of sourcing strategies in the search for market differentiation, the collector stockholder will have much more market power than they may realise, especially with the potential challenges of VI1 forms post Brexit.

Individually, top collectors hold more stock than most merchants. There are a lot more large collections than you might imagine. Collectors buy a lot more wine than they consume, so their collections mature and they have the opportunity to become providers to virtual stockholders. Could collectors be the salt and pepper of virtual inventories, providing mature stocks and interest by which differentiation can be achieved? What’s been missing hitherto is an effective channel.  

The Hub market facilitation

The Hub business operating system (or ERP) for the independent wine market systematically supports these models, through its flexible approach to inventory management, workflow management and connectivity. 

Low or virtual inventory models must be able to inventory sources of supply, then sell, then purchase, as supposed to the more traditional workflow of purchasing, recognising as stock and then selling.

Stockholders need to manage and track inventory, ship stock cost efficiently, and decide what to sell, via which channel and when.

Both models need to manage client stored wines and all are trying to add value to the client offering in order to secure the right to resell those wines.

Hub connectivity makes it possible to create a unique blend of inventory feeds that can include multiple sources of supply including Liv-ex and private collections. The Hub makes possible a range of symbiotic industry relationships that would otherwise be difficult and precarious to establish and manage.

One thing’s for certain: the question of what it is to be a wine merchant is a live discussion, as the pandemic exacerbates underlying pressures which in turn accelerates trends. 

The Hub brings increasing agility and greater operational certainty. The nirvana of retailers transacting at close to zero marginal cost is a world away from being realisable, but in the meantime the goal of delivering operational excellence will be driving the independent wine industry and driving us as the industry business operating system provider of choice.

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How 10 wine businesses went digital this summer

The independent wine industry had been gradually going digital before Covid struck; the shift in consumer behaviour that subsequently occurred to online over the last few months was striking, with the best positioned businesses experiencing high double-digit growth. 

Events can act as a tipping point for long-term trends. Lockdown has been that tipping point for the fine wine market; merchants and retailers will need to quickly adapt in order to compete in a fast-evolving world. How they adopt new technology and shift to new platforms will be a key determinant of future success.

How 10 wine businesses went digital this summer

The easy way to save time and “go digital”

Now there’s an affordable, best-in-class option. In May 2020 Wine Owners released the Hub, a business operating system (also known as an ERP) designed exclusively for the independent wine sector. And because the Hub was designed to be Cloud-based Software as a Service (SaaS), there are no upfront software costs and no minimum contract period.

The Hub excels at management of all types of wine inventory and information (the complex bit), takes care of your main business processes and helps you to develop operational excellence. That means you can carry on business just as you do today, but in a more efficient way and in the knowledge that you’ll be able to more effectively track every purchase order and sale. 

How many times have you heard wine businesses say “our ecommerce is taking rather longer to build than we had expected”? Going digital is made easy with the Hub Webshop, an out-of-the-box ecommerce option that enables you to develop online sales. It’s setup to be fully integrated with the Hub, and because the Hub is built around wine product data, it’s easy to build an engaging experience for your Webshop visitors with content that helps them buy. 

It’s the affordable and sure way to move your business to digital and sell wine online.

The Hub Webshop | How 10 wine businesses went digital this summer

In the space of 12 weeks this summer 10 companies adopted the Hub

Here is what two of the first have to say:

Gilles Corre, Founder and CEO of Asset Wines, a fast growing fine wine merchant and importer, was the first to adopt the Hub at the start of May 2020. 

Gilles commented, “the Hub works beautifully out of the box for wine merchants. We see this as a long-term solution which meets our immediate requirements, but we’re also excited that it offers a tremendous roadmap that addresses our industry’s needs. It will allow us to grow and evolve.”

“As far as day to day operations are concerned, we appreciate being able to view our entire stock wherever it is in real time, which was incredibly challenging before we went onto the Hub. We love it.”

Ludovic Surina, Private Client Director at Mr Wheeler, the independent family-owned wine merchants, added:

“The Hub revolutionised the efficiency of our order processing; intuitive, a perfect fit with our needs and with a brilliant dashboard to manage orders from inception all the way to payment and delivery. The cherry on the cake is the ability to take orders on a tablet or a phone – perfect to stay on top of purchase or sales orders even while on the move!”

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New, first of a kind, digital operating platform for the independent wine sector set to power growth

The Hub provides the basis for fine wine merchants, retailers, brokers and importers to strengthen and grow their operations with a software platform capable of improving current operations and opening up new market opportunities.

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Wine Owners today announces the beta release of the Wine Hub, a state-of-the-art, first of its kind, business operating platform designed specifically for the independent wine sector. The release coincides with a period when the business of wine is rapidly going digital. Sales through websites have doubled during the second quarter of 2020.

The Hub provides the basis for fine wine merchants, retailers, brokers and importers to strengthen and grow their operations with a software platform capable of improving current operations and opening up new market opportunities.

The Wine Hub, a state-of-the-art, first of its kind, digital operating platform designed specifically for the independent wine sector.
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The new platform builds on 8 years of wine industry-specific software investments. It leverages that expertise in wine inventory management and packages that know-how into an exceptionally flexible workflow management system that underpins purchasing and sales order processing.  This enables the Hub to deliver operational efficiencies and ensure on going operational excellence. It saves hours of time each week and unlocks the potential to significantly improve the client experience.

The Hub is the first Cloud-based ERP of its kind – a digital operating platform that realises new possibilities for independent wine businesses based around connectivity – with sources of supply and sales channels to market, as well as with best of breed services and plug-ins.

Main Hub features:

  • Built exclusively for the independent wine market
  • A large referential database, plus LWIN
  • Designed to make selling and sourcing more efficient
  • Easy to master and leverage the content that helps you sell
  • Deliver operational excellence and build customer loyalty
  • Saves hours of time every week

Gilles Corre, Founder and CEO of Asset Wines, a fast growing fine wine merchant and importer, was the first to adopt the Hub at the start of May 2020, and has been followed by a further 10 wine businesses in the intervening 12 weeks. 

Gilles commented, “the Hub works beautifully out of the box for wine merchants. We see this as a long-term solution which meets our immediate requirements, but we’re also excited that it offers a tremendous roadmap that addresses our industry’s needs. It will allow us to grow and evolve.”

“As far as day to day operations are concerned, we appreciate being able to view our entire stock wherever it is in real time, which was incredibly challenging before we went onto the Hub. We love it.”

Ludovic Surina, Private Client Director at Mr Wheeler, the independent family-owned wine merchants, added:

“The Hub revolutionised the efficiency of our order processing; intuitive, a perfect fit with our needs and with a brilliant dashboard to manage orders from inception all the way to payment and delivery. The cherry on the cake is the ability to take orders on a tablet or a phone – perfect to stay on top of purchase or sales orders even while on the move!”

Nick Martin, CEO of Wine Owners explains why the Wine Hub has got off to such a strong start. “The idiosyncrasies of the wine market, and its need for an exceptionally flexible approach to inventory management and associated buying and selling processes, means that for too long wine businesses have had to spend fortunes to bend generic business systems into wine shape. Either that, or they’ve got stuck on Spreadsheets or resort to using accounting software for inventorying, which entails massive compromises that ultimately holds back a business.

“We’re tapping into a global need for business improvement and digital readiness without ridiculously high entrance fees, and coming at it from a software as a service (SaaS) starting point. That means no set up fees, no minimum contract periods, free data migration tools and a beautifully fit for purpose platform that’s preloaded with industry-specific product reference data. All this gives us the ability to solve industry problems, support growth and help wine businesses to capitalise on market opportunities.”

For further information:

Wine Owners

Wine Owners develops software as a service (SaaS) platform solutions that are engineered from the ground up for independent wine businesses. We serve the needs of retailers, merchantswarehouses, the on-trade and other services businesses involved in fine wine.

We combine market specialism with a configurable, state of the art online SaaS platform that reduces cost of ownership, improves availability and security, and keeps you up to date with the latest version.

Nick Martin is CEO of Wine Owners, following a career in information management and technology marketing during which he worked for large brands such as Vodafone, BT, IBM, GEC and Disney to build their customer information databases and data-driven marketing capabilities. 

Nick co-founded Wine Owners with ex-Shell technologist and database expert Wolter Visscher, who had previously formed his own software house operating in financial services, health services and publishing.

Contact details:

Nick Martin

nick.martin@wineowners.com

Cellphone + (0)7828 170250

Clotilde Muller, Marketing Manager

Clotilde.muller@wineowners.com

Landline: + 44 (0)20 7278 4377

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